On April 1, 2020 JKL Company discounted with recourse a 9-month, 10% note dated January 1, 2020 with face amount of P6,000,000. The bank discount rate is 12%. The discounting transaction is accounted for as a conditional sale with recognition of contingent liability. On October 1, 2020, the maker dishonored the note receivable. The entity paid the bank the maturity value of the note plus protest fee of P50,000. On December 31, 2020, the entity collected the dishonored note receivable in full plus 12% annual interest on the total amount due.

1.What amount was received from the note receivable?

2.What amount should be recognized as loss on note receivable discounting?

3.What is the total amount collected from the customer on December 31, 2020?

4.If the discounting is secured borrowing, how much is the interest expense included in the transaction to record transaction cost?

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